The Zhitong Finance App learned that Sanjay Melotra, CEO of Micron Technology (MU.US), said on Thursday that artificial intelligence (AI) has fundamentally changed the face of the memory chip industry — an industry that has always been known for sharp cyclical fluctuations.
“Today, without storage, there is no AI. “AI systems require more storage, higher performance storage, and lower power consumption storage,” Melotra said in an interview with Jim Cramer on the “Mad Money” program. “As a result, the value equation for storage has completely changed.”
When he made his remarks, the background was a large-scale semiconductor manufacturing facility under construction — close to Micron's headquarters in Boise, Idaho. The base is part of Micron's plan to invest $250 billion in manufacturing and R&D in the US. According to Melotra, the Boise Park alone will eventually include two fabs, each the size of ten soccer fields; the steel bars used in the single-seat plant can circle the Earth twice if the beginning and end are connected. The first Boise fab is expected to begin wafer production in mid-2027. This huge investment scale reflects how far-reaching Melotra's judgment on how AI can rewrite the future of the storage market.
The storage industry has historically been characterized by cyclical characteristics — strong demand pushes manufacturers to expand production, and oversupply ultimately drives down prices. However, as an engineer, Merotra, who has worked in the chip industry for over 40 years, and co-founded SNDK.US (SNDK.US), pointed out that AI is spawning a more enduring source of demand.
In the AI era, there is an urgent need not only for computational models, but also for continuous handling, storage, and retrieval of massive state data with low latency. HBM and DRAM are responsible for the highest bandwidth working set near the GPU, but model weights, training data sets, checkpoints, vector databases, RAG knowledge bases, inference logs, long-term memory of agents, and some KV cache layers make it impossible to maintain all of the expensive and limited capacity HBM; NAND memory chip product lines such as enterprise-grade NVMe SSDs, so they are beginning to assume a high-performance persistence layer between HBM/DRAM, HDD, and object storage.
He said this opportunity goes far beyond data centers. Melotra anticipates that in the next few years, autonomous vehicles, robots, and AI-enabled consumer devices will all place higher and higher demands on storage capacity.
“Today, storage is indispensable,” Melotra said. “That's why I call it the strategic infrastructure of the AI era.”
Melotra also notes that this demand is changing how customers perceive the value of storage. In the past, customers often only solicit quotes and choose the lowest-priced vendor; now, storage must increasingly be co-designed and co-developed with processors and systems. This makes storage the key to overall system performance rather than just a replaceable component, Melotra said.
“We started working closely with our customers early in their development cycle, or even earlier,” he said. “Our customers have recognized the value of storage because storage is an important support for them to design products that drive their business growth.”
He said Micron is still unable to produce enough chips to meet this demand.
“In all end markets, all of our customers will buy everything we can manufacture,” Merotra also added. Currently, data center customer demand is about 50% higher than what Micron can promise.
In order to better grasp demand trends, Micron is enhancing the predictability of the business through long-term customer agreements — this is also an important shift experienced in an industry that has been heavily affected by price fluctuations in the spot market in the past. At the company's latest earnings conference call at the end of June, Micron announced that it had signed five-year strategic agreements with 16 customers. Melotra said that since then, the company has signed more agreements one after another.
“They have already committed to purchasing volume,” Melotra said. “Thus, this provides us with a stable guarantee of demand.”